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Asian Market Update – Monday: Asian Shares Rally as China Returns from Golden Week

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China golden week

The Big Question: What kind of signals will the upcoming China Party congress offer for markets?

Asian stock markets rallied on Monday with nice gains seen in the Chinese Mainland and slight increases in South Korea and Australia after the Chinese market reopened after an eight-day National Day Holiday known as the Golden Week.

On the Chinese Mainland, the Shanghai Composite Index gained 1.24 percent to 3,390 around midday, while the closely watched CSI 300 index, which tracks shares of the 300 largest Chinese companies listed in Shanghai and Shenzhen, jumped 1.85 percent to 3,907.

Analysts attributed the big gains in the Monday morning session to mainland investors’ eagerness to trade following a weeklong market closure last week, despite lower-than-expected service sector data in the country. The Caixin Services Purchasing Managers Index fell to a 21-month low in September to 50.6, down from 52.7 in August. A reading above 50 indicates an expansion in the service sector.

Also, trade was boosted by a decision last week from the People’s Bank of China to cut the reserve ratio requirement (RRR), cash banks are required to hold as reserves, to boost liquidity.

In Hong Kong, the Hang Seng Index was down 0.38 percent to 28,365 at midday. The Hang Seng Index rallied during the Chinese golden week, as mainland traders flocked to Hong Kong, where markets were open, to trade.

Down Under, the ASX 200 also gained 0.67 percent to 5,748 at midday on Monday.

Japanese and South Korean markets were closed on Monday for local holidays.

Talk of the Day: What will Chinese policymakers signal during the 19th National Congress of the Communist Party of China scheduled for next week? Also, how connected are the markets between the Chinese Mainland and Hong Kong following the establishment of the Shanghai-Hong Kong Stock Connect. Will valuations converge or remain independent of each other as they become more linked?

Also in the news: Fresh signs of rising tensions on the Korean Peninsula emerged after US President Donald Trump tweeted that “only one thing works” in solving the North Korea nuclear issue.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
China-Shanghai Composite Index 3,390.51 1.24%
China- CSI 300 3,907.53 1.85%
Hong Kong –Hang Seng 28,365.08 -0.38%
Australia-ASX 200 5,748.80 0.67%

Cryptocurrencies

Prices of cryptocurrencies saw mixed performance overnight during the Asian trading session on Monday, as the price of bitcoin continued to rally and prices of ethereum and litecoin fell.

At midday in Asia, the bitcoin price was up 0.54 percent to $4,622. Bitcoin price has jumped significantly from about $4,334 on Saturday to surpass the $4,600 mark earlier Monday morning in the Asian trading session.

In a rare moment, the price of ethereum broke with a largely convergent movement with bitcoin on Monday morning, as the it dropped 2.15 percent to $302 at midday in Asia.

Litecoin also saw some losses during the Monday morning session in Asia, as the virtual currency’s price dropped 1.15 percent to $52.42.

Currencies

The Japanese yen gained 0.02 percent against the US dollar at midday Friday to 112.58 per dollar.

The Chinese yuan gained 0.3 percent against the US dollar to 6.6335.

The Australian dollar lost 0.15 percent on the dollar, changing hands at 1.2870 per dollar at midday.

Commodities

WTI Oil was up 0.53 percent to $49.43 per barrel.

Brent Crude gained 0.40 percent to $55.72 per barrel.

Gold was up 0.55 percent to $1,282.89 an ounce.

Business News across Asia

In China, the Chinese government on Monday issued new policy that aims to boost the country’s pharmaceutical industry. The policy said that the Chinese government will accept foreign companies test results and speed up registration process for foreign drugs to enter the Chinese market.

Take away: This is a significant move from China where the drug market is largely off limits to foreign drug-makers. Expect shares of global drug-makers to rise as the news make the round.

Featured image from Zimbio.com

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.3 stars on average, based on 37 rated postsFredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He closely follows stocks, forex and cryptocurrencies, and is always looking for the next great alternative investment opportunity.




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Market Overview

DJ King Crypto Banker

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Hi Everyone,

If you’re reading this, you probably agree that the old school financial industry is in need of a shakeup. It seems that Goldman Sachs agrees.

This hit track is a remix of the old Fleetwood Mac song “Don’t Stop Thinking About Tomorrow.” It was created by Goldman’s incoming CEO David Solomon (AKA: DJ D-Sol). Named after two ancient kings and an angel, Solomon will assume the throne on October 1st.

Current CEO Lloyd Blankfein was famously indecisive about cryptocurrencies, yet over the last few months, it’s become clear that the bank is ramping up their cryptotrading activities in a big way.

Solomon has been a lot more clear on crypto and has gone on record saying that Goldman is focused on crypto due to a high level of demand from their clients.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Dollar Climbs – Gold Falls
  • Bitcoin Party Time
  • Double Double Crypto Day

Please note: All data, figures & graphs are valid as of July 18th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

President Trump admitted yesterday to making a mistake. After causing a global stir backing Putin over the FBI at the Helsinki summit, Trump has now walked back his comments and even admitted for the first time that he agrees with the assessment that Russia was indeed behind the meddling in the 2016 elections.

Though many remain unconvinced, the markets remain unfazed and instead the focus from many analysts remains on the possibility of a ramped up trade war with China and on the Fed’s actions.

In his testimony yesterday, Fed Chair Jerome Powell did his best not to be political but did note that the effects of further tariffs would likely be felt throughout the US economy. Today Powell testifies before the House Financial Services committee. We can probably expect further questions from the House regarding the specific reaction the economy might have to said tariffs.

Stocks are rather mixed today but we do have notable moves in the currency market where the US Dollar is gaining strength.

The US Dollar Index is once again bumping up against resistance at 95 points. If this level is passed, it could lead to further gains, especially since the United States seems to be a lot more aggressive than the rest of the world on their plans to raise interest rates.

In line with the stronger Dollar, the metals have continued to decline. Gold is now the cheapest it’s been in over a year.

Bitcoin Surge!!

After more than a month of doing nothing, bitcoin broke out yesterday rising $656 in 40 minutes, bringing life and optimism back into the market.

Here we can see the strong break above the key resistance level of $6,800, clearing quickly past $7,000 then spending a short time above $7,500 before a retracement.

By looking at the volumes, it seems that the cause of the surge was from some fresh money entering the market. This graph from www.cryptocompare.com shows the incredible volume spike at the time of the surge.

This one shows the volumes by currency. The blue circle is the exact time of the surge. Notice the spike in USD volumes?

Lately, we’ve been seeing a trend that Tether (USDT) has been becoming more prominent in overall volumes. Tether volumes generally indicate cryptotraders speculation on the exchanges. The fact that this surge happened on USD and not Tether might indicate that it is due to fresh money coming in.

Double Double Crypto Day

Today the US Congress is set to hold not one, but two separate hearings that relate to cryptocurrencies. This is a clear sign that the US government is taking the crypto industry seriously and it seems that point of both hearings will be to help not harm innovation in the space.

The double-header comes as the SEC’s mailbox is reportedly inundated with letters from citizens urging them to approve VanEck’s Bitcoin backed ETF at their hearing on August 10th.

Shifting over to Wall Street, it seems that the bitcoin monthly futures contracts on both the CME and the CBOE group will expire today. As we’ve stated before, there is nothing to fear from the expiration of these contracts. The chances that any large player is trying to manipulate the markets using them is very slim.

Just to get a picture of the volumes of these markets, I’ve pulled the following graph from the Bloomberg terminal for you. This shows the daily volumes on the CBOE’s XBT futures since inception.

The small white line shows the average daily turnover, which is just under 5,000 BTC.

Even though the volumes on the CME are higher, it’s less significant for this analysis since they are using a more complex index as a reference rate for contract settlement and thus would be much more difficult for anyone to try and manipulate.

As always, let me know if you have any questions, comments, or feedback. I’m always happy to hear them. Let’s have an excellent day ahead!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Market Overview

Market Update: U.S. Stocks Rise After Fed Chairman Testimony; Earnings in Focus

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U.S. stocks rebounded Tuesday after Federal Reserve Chairman Jerome Powell told Congress that economic growth and inflation should keep the central bank on track to raise interest rates later this year.

Stocks Rise

All of Wall Street’s major indexes reported gains on Tuesday, with the Nasdaq Composite Index returning to record territory. The technology-focused average climbed 0.6% to 7,855.12.

The broader S&P 500 Index rose 0.4% to close at 2,809.55, with seven of 11 primary sectors finishing in positive territory. Materials stocks were the biggest gainers, rising 1.3% as a cluster. Technology, consumer staples and healthcare stocks also outperformed the broader market.

Dow industrials gained 55.53 points, or 0.2%, to close at 25,119.89.

Expectations of 30-day volatility drifted toward six-month lows on Tuesday in a sign of prevailing calm on Wall Street. The CBOE VIX Volatility Index declined 6% to 12.06.on a scale where 20 represents the historic average.

Powell Testifies

Fed Chair Jerome Powell’s Congressional hearings began Tuesday in a session chaired by the Senate Banking Committee. Though not appearing overly hawkish, the Fed leader indicated that short-term interest rates are likely headed higher in the coming months.

“Overall, we see the risk of the economy unexpectedly weakening as roughly balanced with the possibility of the economy growing faster than we currently anticipate,” Powell said.

He added: “The unemployment rate is low and expected to fall further. Americans who want jobs have a good chance of finding them.”

The Fed’s policy-setting board is scheduled to meet July 31 but is not expected to raise interest rates again until the September gathering. Policymakers and investors have priced in two more upward adjustments this year to the federal funds rate.

Powell will resume his testimony on Wednesday.

Earnings in the Spotlight

With corporate earnings season in full swing, investors are closely monitoring top- and bottom-line results of S&P 500 companies.

Netflix (NFLX) reported weaker than expected subscriber growth late Monday, sending share prices sharply lower. According to The Wall Street Journal, the stock was poised for its single-worst session in two years.

Goldman Sachs Group Inc. (GS) posted bottom-line results that were higher than expected, but rising legal costs weighed on share prices. The Wall Street giant reported per-share earnings of $5.98, crushing forecasts for $4.66. Organization-wide revenue jumped 19% to $9.40 billion, compared with estimates for $8.74 billion.

The earnings season is off to a positive start with roughly nine of ten S&P 500 companies posting stronger than expected profit results. However, as of Friday, only 5% of the S&P 500’s constituents had reported.

Despite the robust results, half of the S&P 500 companies that reported as of Friday said currency swings had a negative impact on their business. After a disastrous start to the year, the U.S. dollar index has returned more than 6% over the past three months. DXY rose half a percent on Tuesday.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 499 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Market Overview

The King is a Fink

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Hi Everyone,

It’s true, I’ve always enjoyed reading the paper. When I was younger I used to track the price of gold daily in my grandfather’s copy of the Wall Street Journal. Before that though, I was drawn to the funnies.

The Wizard of ID is a classic. For those of you who aren’t familiar, it’s about a tyrannous but stout dictator, who hated it when people would call him a “fink,” even though the term has many meanings.

Speaking on Bloomberg yesterday, Blackrock’s CEO Larry Fink weighed in on many important issues including the ongoing trade wars as well as shooting down recent rumors that Blackrock is about to get into crypto.

The full video can be found here:

With $6.28 trillion under management, Blackrock is one of the largest financial institutions in the world and Fink is definitely the king. So it pays to listen to what he sees from this unique point of view.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Trumputin Turning Heads
  • Earnings Season (New Tool)
  • 75 Lambo Traffic Jam (New Research Paper on ADA)

Please note: All data, figures & graphs are valid as of July 17th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Shock and awe were witnessed on the global main stage yesterday at the Helsinki Imperial Palace, where President Vladimir Putin and Donald Trump made jaws drop by aligning themselves on more than a half dozen hot button issues.

Picking up the most headlines was this statement, where Trump seemed to side with Putin over his own Intelligence Agency. Yet, despite the calls of “treasonous trump” from both Democrats and Republicans, the best the American people can hope for are some fair and compelling conclusions from special investigator Robert Mueller.

Meanwhile, stock markets are firmly in the red in Asia and Europe this morning as talk of a trade war and Fed tightening overshadow bullish investor sentiment.

Later today, about 30 minutes after the opening bell on Wall Street, we’ll get a special spectacle. Fed Chair Jerome Powell will be in front of the US Senate Banking Committee, in addition to his prepared statement, there’ll also be a Q&A session. Should be fun to watch.

Earnings Season Underway (New Tool)

For those of you holding individual stocks, which I hope is most of you, earnings reports are important. Yesterday, some sour earnings sent Netflix down by nearly 15% after hours.

In order to help you keep better track of these opportunities, we’ve put together a nifty tool to help you keep track of which companies are about to publish their results.

Please bookmark this page: https://www.etoro.com/investing/earnings-reports/

Simply scroll down to see the schedule, as well as the forecasted EPS. If you’re interested in a specific stock, you can click the “+” button to add it directly to your watchlist. As well, you can search directly for upcoming announcements by company or by a future date.

Ether Spammer

Five million green teas, 75 Lambos, 25 Coinbase seed rounds, or 0.9% of the Telegram ICO.

According to Vitalik Buterin, that’s what it’s costing someone to spam the Ethereum network. On Sunday, the Ethereum network was clogged pretty much the entire day reaching a peak of 62,715 unconfirmed transactions at one point.

The miners were able to get that number down to under 10,000 this morning but the two nasty spikes last night along with Vitalik’s tweet indicate that some malicious player may be intentionally creating activity on the network in order to slow it down.

While Ethereum is by far the most popular platform for dApps at the moment, it’s clear that if they don’t scale quickly it may not stay that way forever.

New Research Paper (ADA)

Several blockchain 3.0 competitors are already under construction and after looking at all the top contenders, we’ve found that one of the most promising ones is Cardano.

For your convenience, we’ve put together the following research paper in order to assist you to make the best possible investment decisions when considering this unique and exciting token for your portfolio.

Please find the new research paper at: eToro.tw/Research-ADA

As with all emerging technologies investing in this project may be risky. Because the network is still in its infancy, we really have no way of pinpointing exactly what each ADA token should be worth and so should only be used as a small part of a well-diversified portfolio.

Let’s have an awesome day ahead!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 115 rated postsSenior Market Analyst at Etoro.com.




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